Page 47 - IC23 life insurance application

Insurance Documents

Life insurance is a legally enforceable contract between two parties both of whom

are legally qualified to contract. It is therefore, necessary that the terms and

contracts of the agreement must be suitably documented in a manner that would

make it clear that both parties to the contract are Ad-idem i.e., of the same mind. Ad-

Idem means that both the parties understand the same thing in the same sense or

are of the same mind on the same subject. There must be consensus or Ad-Idem

between the parties to the contract.

This is possible provided all the terms and conditions, rights and duties - privileges

and obligations are properly documented in terms which can be clearly interpreted in

a court of law. Between two human beings, sometime silence means an

acceptance. But as the insurer is a legal personality entitled to contract verbal

discussion between parties to the contract is not possible and hence there is a need

for documentation.

Insurance is also a contract of utmost good faith and enforced only in the distant

future. It is therefore necessary that the declarations made by both the parties should

be put in black and white for future reference. Any suppression, wilful and material

shall make the contract void. The insured, therefore, has a duty to declare all that he

knows about himself, his health, his financial status in answering questions

contained in the proposal form and other ancillary documents which may be required

by the insurer. We shall discuss in this chapter the various kinds of documents which

become necessary at three stages of a policy - (1) at the stage of proposal, which if

accepted result into a policy, (2) during the duration of the policy where several

Copyright Dr Rakesh Agarwal Sashi Publications Private Limited

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